Has Darling done enough to save his job?

Alistair Darling looked confident as he assured Labour's conference that financial stability was his main concern.

Graham Dines

Alistair Darling looked confident as he assured Labour's conference that financial stability was his main concern. But Political Editor Graham Dines wonders if the Chancellor can have confidence that he will survive a Cabinet reshuffle.

NO matter what party they belong to, when a Prime Minister is in trouble he takes it out on his Cabinet, blaming hapless ministers for a mess which in reality is of his or hers own making.

It's code name is leadership.

Harold Macmillan, in a desperate attempt to restore his popularity, culled a large chunk of his ministerial team in what became known as the night of the long knives.

Macmillan's plight, however, does not even register on the scale that Gordon Brown is facing. His opponents may have decided this week that discretion is the better part of valour and cooled their talk of trying to dump him - although East Anglia MP Charles Clarke seems to be crusading on his own for change -but the underlying problem won't go away.

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There's talk that plotters have given the Prime Minister nine months, but the way is being paved for Brown to move decisively to “refresh and renew” his administration.

It seems certain that a Cabinet reshuffle will take place next week, although it's unlikely to be while the Tories are meeting in Birmingham in their conference. A mass sacking of ministers would be a Godsend to David Cameron.

But a reshuffle there will be, and much speculation centres on whether Alistair Darling will be made a scapegoat for Brown's ills.

Yesterday Darling addressed Labour delegates in Manchester, moving to assure them and the wider audience of those at home and those who work in the financial services sector in the City of London that the Government was on top of the crises caused by the credit crunch and the fall of Lehmann Brothers Bank in the USA and Halifax-Bank of Scotland in the UK.

He even felt confident enough to tell delegates: “In the next few weeks, Gordon (Brown) and I will be in the US and Europe working with our counterparts to put in place the measures internationally needed to prevent the mistakes and misjudgements which caused this crisis.”

Really? Has he had the nod from the Prime Minister that he's safe? Or was he making a prediction which will be shattered by a reshuffle?

It's true that Brown was in the vanguard of the standing ovation awarded to Darling by conference delegates. But then, he could hardly have sat on his hands ­- the Stock Market is so volatile that it would have sent into freefall once again.

But during interviews on the TV breakfast talk shows, Darling was far less sure footed. On both BBC Breakfast and GMTV, interviewers constantly asked him if taxes would rise to pay for interventions into the markets.

But over and over again, Darling refused to say “no.” Here was a Chancellor who is only too aware that the price rises in fuel, heating, and food are hurting the public, but he would not reach out to reassure them that income and indirect taxes would not rise.

All he would say is that this was not the time for taking money out of the system - implying that taxing people more which results in them not buying goods and services which in turn leads to recession and redundancies.

A simple `no' was all that was required. His refusal to utter that word will inevitably lead to speculation that an extra 5p in the pound will have to be raised from taxpayers.

To conference, he warned of a bumpy road ahead for the economy as he promised tighter regulation to stabilise the banking system. But stressed: “I will continue to do whatever it takes to maintain financial stability and I remain confident we will do so.

“I will introduce a new Banking Reform Bill in the Commons in a fortnight - strengthening the supervision of the banking system, making it easier to intervene if a bank gets into trouble, giving new powers to the regulators.

“We are also going to put in place measures to give added protection to savers. It's not a question of light-touch regulation against heavy-handed regulation. It's about effective regulation.

“I can promise that wherever weaknesses are found in the financial system - whether in the powers of the Government, the Bank of England or the FSA - I will take steps to deal with it.”

He also promised he would be looking at the culture of "huge bonuses which have distorted the way decisions are made.”

It didn't sound like a speech made by a man who believes he is going to be removed from the Treasury. But ministers will be shunted to one side and if neither he nor Foreign Secretary David Miliband are shifted, then the Government will neither look nor feel refreshed.

This is a difficult week for Labour. Nervousness that it would descend into name calling and an attempted coup have fallen away, with the exception of Charles Clarke's at times testy interventions.

But the underlying current is of the need for a change of direction and, failing that, a change of leader. Labour and Brown are likely to get a bounce in the polls after their conference. This will be undone by by a bounce for the Tories after their conference.

Today we'll hear from Brown what policies he'll take to save his job. But his ministers will have to wait another nine days to know their fate.

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